16% of retired NFL players go bankrupt, a report says

It may be hard to believe that professional athletes, who earn so much money at such a young age, could possibly end up bankrupt. But nearly 16% of those in the National Football League do—just not right away.

According to a new working paper from the National Bureau of Economic Research (NBER), 15.7% of NFL players have filed for bankruptcy 12 years after they retired.

The paper, entitled “Bankruptcy Rates Among NFL Players with Short-Lived Income Spikes,” examines the traditional model of consumption smoothing (save money when income is high for later on, when income is low) in the context of athletes, who undergo what is really the opposite income path of most people. Athletes hit their earnings peak almost immediately after school, while young. Then they retire young, and in the vast majority of cases, never again earn at the same levels. Because of that model, it can be difficult for them to save. They are often taken advantage of financially, or simply haven’t had any guidance in preparing to manage their money after retirement.

NFL players have an “income profile,” says a précis to the NBER paper, that “does not just gradually rise then fall, as it does for most workers, but rather has a very large spike lasting only a few years.” The paper uses data on all players drafted to NFL teams from 1996 to 2003. The data finds that bankruptcy filings begin “very soon after retirement” (but just 1.9% of retirees have filed after two years) and “continue at a substantial rate through at least the first 12 years of retirement.”

It is also of note that the study suggests bankruptcy rates are not affected by a player’s career length. That is: playing for longer, surprisingly, did not make it any less likely a player would go bankrupt.

As Slate points out, the 15.7% figure should not lead anyone to conclude that the other 84% of NFL alums are all raking in the money and living high on the hog—many more than 15.7% struggle financially after leaving the sport, and many may go broke or get close to it. But this paper strictly measures bankruptcy filings.

Similarly, ESPN’s Five Thirty Eightnotes that the overall bankruptcy rate for NFL players is nearly the same as the rate for all Americans in the same age bracket (25-34). But this, too, should not be interpreted as a sign that NFL players struggle less than previously thought. After all, shouldn’t these high-paid athletes have a far lower rate of bankruptcy than normal folks?

It’s worth noting that because this is a “working paper,” the report has not yet been peer-reviewed, so its conclusions may come under scrutiny. But the insights it yields are compelling in the ongoing conversation of professional athletes and their attempts to keep earning after walking off the field (or court, or ice). It is a topic that Fortune has examined in depth over the past year in our Pro-Files series with Sports Illustrated. We’ve told the stories of 16 former pro athletes who have avoided financial trouble and instead have thrived in business—six of them have been former NFL players, including Roger Staubach (who moved on to real estate), Gary Fencik (private equity) and Alex Bernstein (now a tech venture capitalist in Oakland).

In one recent Pro-Files story, former Pittsburgh Steelers wide receiver (and Hall of Famer) John Stallworth addressed the difficulties NFL players face with managing their money after they hang up their helmet and cleats. He recalled his old coach, Chuck Noll, counseling players not to wait until the day after retirement to ask themselves what was next. “I made up my mind,” said Stallworth, “I was not going to play and make a little money, and then wonder what happened to it.”

It may be hard to believe that professional athletes, who earn so much money at such a young age, could possibly end up bankrupt. But nearly 16% of those in the National Football League do—just not right away.

According to a new working paper from the National Bureau of Economic Research (NBER), 15.7% of NFL players have filed for bankruptcy 12 years after they retired.

The paper, entitled “Bankruptcy Rates Among NFL Players with Short-Lived Income Spikes,” examines the traditional model of consumption smoothing (save money when income is high for later on, when income is low) in the context of athletes, who undergo what is really the opposite income path of most people. Athletes hit their earnings peak almost immediately after school, while young. Then they retire young, and in the vast majority of cases, never again earn at the same levels. Because of that model, it can be difficult for them to save. They are often taken advantage of financially, or simply haven’t had any guidance in preparing to manage their money after retirement.

NFL players have an “income profile,” says a précis to the NBER paper, that “does not just gradually rise then fall, as it does for most workers, but rather has a very large spike lasting only a few years.” The paper uses data on all players drafted to NFL teams from 1996 to 2003. The data finds that bankruptcy filings begin “very soon after retirement” (but just 1.9% of retirees have filed after two years) and “continue at a substantial rate through at least the first 12 years of retirement.”

It is also of note that the study suggests bankruptcy rates are not affected by a player’s career length. That is: playing for longer, surprisingly, did not make it any less likely a player would go bankrupt.

As Slate points out, the 15.7% figure should not lead anyone to conclude that the other 84% of NFL alums are all raking in the money and living high on the hog—many more than 15.7% struggle financially after leaving the sport, and many may go broke or get close to it. But this paper strictly measures bankruptcy filings.

Similarly, ESPN’s Five Thirty Eightnotes that the overall bankruptcy rate for NFL players is nearly the same as the rate for all Americans in the same age bracket (25-34). But this, too, should not be interpreted as a sign that NFL players struggle less than previously thought. After all, shouldn’t these high-paid athletes have a far lower rate of bankruptcy than normal folks?

It’s worth noting that because this is a “working paper,” the report has not yet been peer-reviewed, so its conclusions may come under scrutiny. But the insights it yields are compelling in the ongoing conversation of professional athletes and their attempts to keep earning after walking off the field (or court, or ice). It is a topic that Fortune has examined in depth over the past year in our Pro-Files series with Sports Illustrated. We’ve told the stories of 16 former pro athletes who have avoided financial trouble and instead have thrived in business—six of them have been former NFL players, including Roger Staubach (who moved on to real estate), Gary Fencik (private equity) and Alex Bernstein (now a tech venture capitalist in Oakland).

In one recent Pro-Files story, former Pittsburgh Steelers wide receiver (and Hall of Famer) John Stallworth addressed the difficulties NFL players face with managing their money after they hang up their helmet and cleats. He recalled his old coach, Chuck Noll, counseling players not to wait until the day after retirement to ask themselves what was next. “I made up my mind,” said Stallworth, “I was not going to play and make a little money, and then wonder what happened to it.”